Horizon Bancorp (HBNC) 8-K Horizon Bancorp Announces an Increase in 2015 First Quarter Earnings

Exhibit 99.1

Contact: Mark E. Secor

Chief Financial Officer

Phone: (219) 873-2611

Fax: (219) 874-9280

Date: April 22, 2015

FOR IMMEDIATE RELEASE

Horizon Bancorp Announces an Increase in 2015 First Quarter Earnings

Michigan City, Indiana (NASDAQ GS: HBNC) – Horizon Bancorp today announced its unaudited financial results for the three-month period ended March 31, 2015.

SUMMARY:

· Net income for the first quarter of 2015 increased 56.8% or $1.9 million compared to the same period in 2014 to $5.4 million or $.55 diluted earnings per share.

· Total loans increased 24.3% on an annualized basis during the first quarter of 2015.

· Commercial loans increased 12.9% on an annualized basis during the first quarter of 2015.

· Net interest income for the first quarter of 2015 increased 27.2% or $3.6 million compared to the same period in 2014.

· Non-interest income for the first quarter of 2015 increased 28.0% or $1.5 million compared to the same period in 2014.

· Net interest margin, excluding the impact of acquisitions (“core net interest margin”), was 3.47% for the first quarter of 2015 compared to 3.38% for the same period in 2014.

· Return on average assets was 1.05% for the first quarter of 2015.

· Return on average common equity was 11.66% for the first quarter of 2015.

· Horizon’s tangible book value per share rose to $16.80 at March 31, 2015, compared to $16.26 at December 31, 2014 and $15.52 at March 31, 2014. $16.80 is the highest tangible book value per share in the company’s history.

· On February 19, 2015, Horizon announced the acquisition of Peoples Bancorp and its wholly-owned subsidiary, Peoples Federal Savings Bank of DeKalb County, headquartered in Auburn, Indiana.

· Horizon’s full-service Carmel, Indiana office opened on February 23, 2015.

Craig Dwight, Chairman and CEO, commented: “I am pleased to announce Horizon’s 2015 first quarter results, which reflected positive contributions from all four revenue streams – retail banking, business banking, mortgage banking and wealth management.  Headlining the quarter was the

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Pg. 2 cont. Horizon Bancorp Announces an Increase in 2015 First Quarter Earnings

continued growth of our loan portfolio, an increase in mortgage activity and the announcement of a strategic partnership whereby Horizon will acquire Peoples Bancorp, a company with approximately $486.6 million in total assets headquartered in Auburn, Indiana.”

Dwight continued, “Our investments in people and technology along with an improving economic environment resulted in a strong first quarter of 2015.  Net income and diluted earnings per share, excluding non-core items, increased 38.7% and 30.5%, respectively, compared to the same period of 2014. Loan growth was solid across all product types, which continued to help offset net interest margin pressure.  Mortgage activity increased as the recent decrease in interest rates boosted mortgage warehouse balances and the gain on sale of mortgage loans, continuing to validate this revenue stream as a quality source of capital generation.”

Non-GAAP Reconciliation of Net Income and Diluted Earnings per Share
(Dollar Amounts in Thousands Except per Share Data)
	Three Months Ended
	March 31
	2015			2014
	(Unaudited)			(Unaudited)
Non-GAAP Reconciliation of Net Income
Net income as reported	$	5,358		$	3,417
Merger expenses		146			311
Tax effect		(51	)		(109	)
Net income excluding merger expenses		5,453			3,619
Acquisition related purchase accounting adjustments ("PAUs")		(1,083	)		(389	)
Tax effect		379			136
Net income excluding PAUs		4,749			3,367
Gain on sale of investment securities		(124	)		-
Tax effect		43			-
Net income excluding gain on sale of investment securities	$	4,668		$	3,367
Non-GAAP Reconciliation of Diluted Earnings per Share
Diluted earnings per share as reported	$	0.55		$	0.38
Merger expenses		0.02			0.03
Tax effect		(0.01	)		(0.01	)
Diluted earnings per share excluding merger expenses		0.56			0.40
Acquisition related PAUs		(0.11	)		(0.04	)
Tax effect		0.04			0.02
Diluted earnings per share excluding PAUs		0.49			0.37
Gain on sale of investment securities		(0.01	)		-
Tax effect		0.00			-
Net income excluding gain on sale of investment securities	$	0.48		$	0.37

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The following table presents the amount and growth rate of loans by product type for the three months ended March 31, 2015.

Loan Growth by Type Three Months Ended March 31, 2015
(Dollars in Thousands)
									Annualized
	March 31		December 31		Amount		Percent		Percent
	2015		2014		Change		Change		Change
	(Unaudited)
Commercial loans	$	695,736	$	674,314	$	21,422	3.2	%	12.9	%
Residential mortgage loans		260,390		254,625		5,765	2.3	%	9.2	%
Consumer loans		326,334		320,459		5,875	1.8	%	7.4	%
Held for sale loans		6,229		6,143		86	1.4	%	5.7	%
Subtotal		1,288,689		1,255,541		33,148	2.6	%	10.7	%
Mortgage warehouse loans		178,899		129,156		49,743	38.5	%	156.2	%
Total loans	$	1,467,588	$	1,384,697	$	82,891	6.0	%	24.3	%

“The aforementioned loan growth has been critical in maintaining our net interest margin throughout the low interest rate environment that continues to persist,” Dwight continued.  “Horizon’s core net interest margin, excluding income from acquisition-related purchase accounting adjustments, increased from 3.38% in the first quarter of 2014 to 3.47% in the first quarter of 2015.  The core net interest margin decreased only two basis points from the previous quarter.”

Non-GAAP Reconciliation of Net Interest Margin
(Dollar Amounts in Thousands)
	Three Months Ended
	March 31		December 31		March 31
	2015		2014		2014
	(Unaudited)				(Unaudited)
Net Interest Margin As Reported
Net interest income	$      16,886		$     16,523		$     13,272
Average interest-earning assets	1,899,870		1,865,750		1,598,285
Net interest income as a percent of average interest-earning assets	3.70	%	3.64	%	3.48	%
Impact of Acquisitions
Interest income from acquisition-related purchase accounting adjustments	$       (1,083	)	$         (719	)	$         (389	)
Net Interest Margin Excluding Impact of Acquisitions
Net interest income	$      15,803		$     15,804		$     12,883
Average interest-earning assets	1,899,870		1,865,750		1,598,285
Net interest income as a percent of average interest-earning assets	3.47	%	3.49	%	3.38	%

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Horizon’s loan loss reserve ratio, excluding loans with credit-related purchase accounting adjustments, stood at 1.22% as of March 31, 2015.

Allowance for Loan and Lease Loss Detail
As of March 31, 2015
(Dollars in Thousands, Unaudited)
	Horizon
	Legacy			Heartland			Summit			Total
Pre-discount loan balance	$	1,341,040		$	32,854		$	93,760		$	1,467,654
Allowance for loan losses (ALLL)		16,380			254			-			16,634
Loan discount		N/A			2,061			4,234			6,295
Total ALLL+loan discount		16,380			2,315			4,234			22,929
Loans, net	$	1,324,660		$	30,539		$	89,526		$	1,444,725
ALLL/ pre-discount loan balance		1.22	%		0.77	%		0.00	%		1.13	%
Loan discount/ pre-discount loan balance		N/A			6.27	%		4.52	%		0.43	%
Total ALLL+loan discount/ pre-discount loan balance		1.22	%		7.05	%		4.52	%		1.56	%

On February 18, 2015, Horizon entered into an agreement to acquire Peoples Bancorp and its wholly-owned subsidiary, Peoples Federal Savings Bank of DeKalb County (collectively, “Peoples”), in a cash and stock merger. The acquisition is expected to close early in the third quarter of 2015, subject to regulatory and shareholder approval. Headquartered in Auburn, Indiana, Peoples serves the greater northeast Indiana and southwest Michigan markets through 16 full-service banking locations. As of December 31, 2014, Peoples Bancorp had total assets of $486.6 million.

Dwight noted, “This acquisition aligns well with Horizon’s strategic growth plan by enhancing our existing presence in southwest Michigan and providing entry into the attractive northeast Indiana market.  Peoples has proudly served its customers for eighty nine years with good advice and a commitment to community banking.  We look forward to continuing this commitment and are thrilled to partner with their outstanding team of banking professionals.”

Income Statement Highlights

Net income for the first quarter of 2015 was $5.4 million or $.55 diluted earnings per share compared to $3.4 million or $.38 diluted earnings per share in the first quarter of 2014.  The increase in net income from the previous year reflects an increase in interest income primarily due to loan growth and an increase in non-interest income due to an increase in gain on sale of mortgage loans, interchange fees and fiduciary activities partially offset by an increase in the provision expense and non-interest expenses.

Horizon’s net interest margin was 3.70% during the first quarter of 2015, up from 3.64% for the prior quarter and 3.48% for same period of 2014.  The increase in net interest margin compared to the prior quarter and the same period of 2014 was due to acquisition-related purchase accounting

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adjustments, lower funding costs and a higher ratio of loans as a percentage of average earning assets.  Excluding purchase accounting adjustments related to the 2012 Heartland Bancshares, Inc. and the 2014 SCB Bancorp, Inc. acquisitions, the margin would have been 3.47% for the first quarter of 2015 compared to 3.49% for the prior quarter and 3.38% for the same period of the prior year.  Interest income from acquisition-related purchase accounting adjustments was $1.1 million, $719,000, and $389,000 for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

Residential mortgage lending activity during the first quarter of 2015 generated $2.4 million in income from the gain on sale of mortgage loans, an increase of $1.0 million from the first quarter of 2014.  Total origination volume in the first quarter of 2015, including loans placed into portfolio, totaled $88.7 million, representing an increase of 40.7% from the first quarter of 2014 of $52.6 million.  Purchase money mortgage originations during the first quarter of 2015 represented 50.2% of total originations compared to 67.6% of originations during the previous quarter and 70.6% during the first quarter of 2014.

Lending Activity

Total loans increased $82.9 million from $1.4 billion as of December 31, 2014 to $1.5 billion as of March 31, 2015 as mortgage warehouse loans increased by $50.0 million, residential mortgage loans increased by $5.8 million and consumer loans increased by $5.9 million.  Commercial loans increased $21.4 million or 12.9% on an annualized basis from $674.3 million at December 31, 2014 to $695.7 million at March 31, 2015.

Total loan balances in the Kalamazoo and Indianapolis markets continued to grow during the first quarter of 2015 to $145.8 million and $132.9 million, respectively, as of March 31, 2015. Kalamazoo’s aggregate loan balances increased $3.6 million or 10.1% on an annualized basis, and Indianapolis’ aggregate loan balances increased $9.5 million or 31.2% on an annualized basis. Combined, these markets contributed $13.1 million in loan growth during the first three months of 2015 or 19.9% on an annualized basis.

The provision for loan losses was $614,000 for the three months ended March 31, 2015 compared to no provision expense for the same period of 2014.  The higher provision for loan losses for the first quarter of 2015 compared to the same period of 2014 was primarily due to continued loan growth.

The ratio of the allowance for loan losses to total loans decreased to 1.13% as of March 31, 2015 from 1.19% as of December 31, 2014 due to an increase in total loans, partially offset by an increase in the allowance for loan losses from $16.5 million as of December 31, 2014 to $16.6 million as of March 31, 2015.  The ratio of the allowance for loan losses to total loans, excluding loans with credit-related purchase accounting adjustments, was 1.22% as of March 31, 2015.

Non-performing loans totaled $22.4 million as of March 31, 2015 and December 31, 2014.  Compared to December 31, 2014, non-performing real estate loans and consumer loans increased by $168,000 and $85,000, respectively, and non-performing commercial loans decreased by

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$315,000.  As a percentage of total loans, non-performing loans were 1.52% at March 31, 2015, down 10 basis points from 1.62% at December 31, 2014.

Expense Management

Total non-interest expense was $1.6 million higher in the first quarter of 2015 compared to the same period of 2014.  The increase in the first quarter of 2015 compared to the same period of 2014 was primarily due to an increase in salaries expense, net occupancy expenses and other expenses due to overall company growth and market expansion and increases in commission and bonuses and loan expense due to an increase in loan volume.

Use of Non-GAAP Financial Measures

Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP.  Specifically, we have included non-GAAP financial measures of the net interest margin and the allowance for loan and lease losses excluding the impact of acquisition-related purchase accounting adjustments and net income and diluted earnings per share excluding the impact of one-time costs related to acquisitions, acquisition-related purchase accounting adjustments and other events that are considered to be non-recurring.  Horizon believes that these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non-core items, although these measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure.

About Horizon

Horizon Bancorp is a locally owned, independent, commercial bank holding company serving Northern and Central Indiana and Southwest and Central Michigan through its commercial banking subsidiary Horizon Bank, NA.  Horizon also offers mortgage-banking services throughout the Midwest. Horizon Bancorp may be reached online at www.horizonbank.com.  Its common stock is traded on the NASDAQ Global Select Market under the symbol HBNC.

Forward Looking Statements

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon.  For these statements, Horizon claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission.  Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance.  The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties.  We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,”

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“will” and similar expressions in connection with any discussion of future operating or financial performance.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.  Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in Horizon’s reports filed with the Securities and Exchange Commission, including those described in its Form 10-K.  Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

Contact:	Horizon Bancorp
	Mark E. Secor
	Chief Financial Officer
	(219) 873-2611
	Fax: (219) 874-9280

#  #  #

HORIZON BANCORP

Financial Highlights

(Dollars in thousands except share and per share data and ratios, Unaudited)

	March 31			December 31			September 30			June 30			March 31
	2015			2014			2014			2014			2014
Balance sheet:
Total assets	$	2,153,965		$	2,076,922		$	2,037,045		$	2,073,251		$	1,806,583
Investment securities		495,315			489,531			495,941			537,618			529,340
Commercial loans		695,736			674,314			677,349			648,202			528,635
Mortgage warehouse loans		178,899			129,156			105,133			140,896			102,146
Residential mortgage loans		260,390			254,625			251,739			235,523			189,893
Consumer loans		326,334			320,459			308,800			296,873			280,120
Earning assets		1,974,251			1,885,576			1,860,041			1,882,724			1,649,653
Non-interest bearing deposit accounts		285,181			267,667			278,527			270,023			238,499
Interest bearing transaction accounts		905,216			930,582			881,299			919,024			840,258
Time deposits		274,699			284,070			289,837			310,056			276,814
Borrowings		440,415			351,198			350,113			340,201			236,043
Subordinated debentures		32,680			32,642			32,603			32,564			32,525
Common stockholders' equity		186,991			181,914			177,280			174,836			157,283
Total stockholders’ equity		199,491			194,414			189,780			187,336			169,783
Income statement:	Three months ended
Net interest income	$	16,886		$	16,523		$	16,400		$	16,788		$	13,272
Provision for loan losses		614			978			1,741			339			-
Non-interest income		7,066			6,738			7,390			6,627			5,522
Non-interest expenses		16,068			15,671			15,353			16,408			14,514
Income tax expense		1,912			1,664			1,738			1,890			863
Net income		5,358			4,948			4,958			4,778			3,417
Preferred stock dividend		(31	)		(31	)		(40	)		(31	)		(31	)
Net income available to common shareholders	$	5,327		$	4,917		$	4,918		$	4,747		$	3,386
Per share data:
Basic earnings per share	$	0.58		$	0.53		$	0.53		$	0.52		$	0.39
Diluted earnings per share		0.55			0.51			0.51			0.50			0.38
Cash dividends declared per common share		0.14			0.14			0.13			0.13			0.11
Book value per common share		20.25			19.75			19.25			19.00			18.22
Tangible book value per common share		16.80			16.26			15.75			15.47			15.52
Market value - high		25.86			26.73			23.67			22.58			24.91
Market value - low	$	22.38		$	22.83		$	20.65		$	19.57		$	20.27
Weighted average shares outstanding - Basic		9,216,011			9,212,156			9,208,707			9,182,986			8,630,966
Weighted average shares outstanding - Diluted		9,609,506			9,628,240			9,588,332			9,560,939			9,021,786
Key ratios:
Return on average assets		1.05	%		0.96	%		0.96	%		0.97	%		0.79	%
Return on average common stockholders' equity		11.66			10.72			10.95			11.82			8.81
Net interest margin		3.70			3.64			3.59			3.78			3.48
Loan loss reserve to total loans		1.13			1.19			1.20			1.18			1.46
Non-performing loans to loans		1.52			1.62			1.47			1.41			1.59
Average equity to average assets		9.56			9.56			9.33			8.79			9.65
Bank only capital ratios:
Tier 1 capital to average assets		8.75			8.80			8.63			8.78			9.11
Tier 1 capital to risk weighted assets		11.47			11.96			12.13			11.47			12.87
Total capital to risk weighted assets		12.54			13.08			13.26			12.53			14.12
Loan data:
Substandard loans	$	27,355		$	27,661		$	35,023		$	35,495		$	32,648
30 to 89 days delinquent		3,945			5,082			3,310			3,671			2,613
90 days and greater delinquent - accruing interest	$	19		$	115		$	62		$	42		$	202
Trouble debt restructures - accruing interest		4,368			4,372			5,838			5,614			4,997
Trouble debt restructures - non-accrual		4,711			2,643			3,061			3,178			3,662
Non-accrual loans		13,282			15,312			10,828			9,844			8,775
Total non-performing loans	$	22,380		$	22,442		$	19,789		$	18,678		$	17,636

8

HORIZON BANCORP

Allocation of the Allowance for Loan and Lease Losses

(Dollars in Thousands, Unaudited)

	March 31		December 31		September 30		June 30		March 31
	2015		2014		2014		2014		2014
Commercial	$	7,876	$	7,910	$	7,515	$	6,958	$	7,236
Real estate		3,281		2,508		3,304		2,367		2,813
Mortgage warehousing		1,272		1,132		1,300		1,559		1,665
Consumer		4,205		4,951		4,041		4,776		4,388
Unallocated		-		-		-		-		-
Total	$	16,634	$	16,501	$	16,160	$	15,660	$	16,102

Net Charge-offs (Recoveries)

(Dollars in Thousands, Unaudited)

	Three months ended
	March 31			December 31		September 30		June 30		March 31
	2015			2014		2014		2014		2014
Commercial	$	(11	)	$	199	$	1,006	$	185	$	(361	)
Real estate		20			101		19		169		18
Mortgage warehousing		-			-		-		-		-
Consumer		472			336		217		426		233
Total	$	481		$	636	$	1,242	$	780	$	(110	)

Total Non-performing Loans

(Dollars in Thousands, Unaudited)

	March 31		December 31		September 30		June 30		March 31
	2015		2014		2014		2014		2014
Commercial	$	11,540	$	11,855	$	9,323	$	8,243	$	7,313
Real estate		6,062		5,894		6,312		6,672		6,357
Mortgage warehousing		-		-		-		-		-
Consumer		4,778		4,693		4,154		3,763		3,966
Total	$	22,380	$	22,442	$	19,789	$	18,678	$	17,636

Other Real Estate Owned and Repossessed Assets

(Dollars in Thousands, Unaudited)

	March 31		December 31		September 30		June 30		March 31
	2015		2014		2014		2014		2014
Commercial	$	307	$	411	$	376	$	452	$	812
Real estate		219		636		875		752		867
Mortgage warehousing		-		-		-		-		-
Consumer		223		154		3		23		39
Total	$	749	$	1,201	$	1,254	$	1,227	$	1,718

9

HORIZON BANCORP AND SUBSIDIARIES

Average Balance Sheets

(Dollar Amounts in Thousands, Unaudited)

	Three Months Ended								Three Months Ended
	March 31, 2015								March 31, 2014
	Average					Average			Average					Average
	Balance			Interest		Rate			Balance			Interest		Rate
ASSETS
Interest-earning assets
Federal funds sold	$	4,804		$	2		0.17	%	$	7,439		$	4		0.22	%
Interest-earning deposits		10,772			3		0.11	%		5,722			3		0.21	%
Investment securities - taxable		360,554			2,149		2.42	%		386,793			2,383		2.50	%
Investment securities - non-taxable (1)		140,748			1,077		4.31	%		147,840			1,123		4.28	%
Loans receivable (2)(3)		1,382,992			16,862		4.96	%		1,050,491			12,954		5.00	%
Total interest-earning assets (1)		1,899,870			20,093		4.39	%		1,598,285			16,467		4.29	%
Non-interest-earning assets
Cash and due from banks		28,994								24,890
Allowance for loan losses		(16,489	)							(16,166	)
Other assets		157,553								138,322
	$	2,069,928							$	1,745,331
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits	$	1,215,862		$	1,232		0.41	%	$	1,079,514		$	1,277		0.48	%
Borrowings		337,430			1,479		1.78	%		228,138			1,422		2.53	%
Subordinated debentures		32,657			496		6.16	%		32,502			496		6.19	%
Total interest-bearing liabilities		1,585,949			3,207		0.82	%		1,340,154			3,195		0.97	%
Non-interest-bearing liabilities
Demand deposits		271,158								223,974
Accrued interest payable andother liabilities		14,989								12,807
Shareholders' equity		197,832								168,396
	$	2,069,928							$	1,745,331
Net interest income/spread				$	16,886		3.57	%				$	13,272		3.32	%
Net interest income as a percent of average interest earning assets (1)							3.70	%							3.48	%

(1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities.  The average rate is presented on a tax equivalent basis.

(2) Includes fees on loans.  The inclusion of loan fees does not have a material effect on the average interest rate.

(3) Non-accruing loans for the purpose of the computations above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees.

10

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollar Amounts in Thousands)

	March 31		December 31
	2015		2014
	(Unaudited)
Assets
Cash and due from banks	$	38,676	$	43,476
Investment securities, available for sale		331,033		323,764
Investment securities, held to maturity (fair value of $171,405 and $169,904)		164,282		165,767
Loans held for sale		6,229		6,143
Loans, net of allowance for loan losses of $16,634 and $16,501		1,444,725		1,362,053
Premises and equipment, net		53,989		52,461
Federal Reserve and Federal Home Loan Bank stock		11,348		11,348
Goodwill		28,176		28,176
Other intangible assets		3,738		3,965
Interest receivable		8,431		8,246
Cash value life insurance		39,640		39,382
Other assets		23,698		32,141
Total assets	$	2,153,965	$	2,076,922
Liabilities
Deposits
Non-interest bearing	$	285,181	$	267,667
Interest bearing		1,179,915		1,214,652
Total deposits		1,465,096		1,482,319
Borrowings		440,415		351,198
Subordinated debentures		32,680		32,642
Interest payable		504		497
Other liabilities		15,779		15,852
Total liabilities		1,954,474		1,882,508
Commitments and contingent liabilities
Stockholders’ Equity
Preferred stock, Authorized, 1,000,000 shares
Series B shares $.01 par value, $1,000 liquidation value
Issued 12,500 shares		12,500		12,500
Common stock, no par value
Authorized, 22,500,000 shares
Issued, 9,289,916 and 9,278,916 shares
Outstanding, 9,232,163 and 9,213,036 shares		-		-
Additional paid-in capital		46,064		45,916
Retained earnings		138,500		134,477
Accumulated other comprehensive income (loss)		2,427		1,521
Total stockholders’ equity		199,491		194,414
Total liabilities and stockholders’ equity	$	2,153,965	$	2,076,922

11

HORIZON BANCORP AND SUBSIDIARIES

Condensed Consolidated Statements of Income(Dollar Amounts in Thousands, Except Per Share Data)

	Three Months Ended March 31
	2015			2014
	(Unaudited)			(Unaudited)
Interest Income
Loans receivable	$	16,862		$	12,954
Investment securities
Taxable		2,154			2,390
Tax exempt		1,077			1,123
Total interest income		20,093			16,467
Interest Expense
Deposits		1,232			1,277
Borrowed funds		1,479			1,422
Subordinated debentures		496			496
Total interest expense		3,207			3,195
Net Interest Income		16,886			13,272
Provision for loan losses		614			-
Net Interest Income after Provision for Loan Losses		16,272			13,272
Non-interest Income
Service charges on deposit accounts		999			923
Wire transfer fees		151			112
Interchange fees		1,102			959
Fiduciary activities		1,297			1,048
Gain on sale of investment securities (includes $124 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to accumulated other comprehensive earnings reclassifications)		124			-
Gain on sale of mortgage loans		2,379			1,411
Mortgage servicing income net of impairment		179			207
Increase in cash value of bank owned life insurance		258			233
Death benefit on bank owned life insurance		145			-
Other income		432			629
Total non-interest income		7,066			5,522
Non-interest Expense
Salaries and employee benefits		8,504			7,483
Net occupancy expenses		1,551			1,424
Data processing		923			870
Professional fees		527			608
Outside services and consultants		626			661
Loan expense		1,257			1,015
FDIC insurance expense		337			256
Other losses		(45	)		38
Other expense		2,388			2,159
Total non-interest expense		16,068			14,514
Income Before Income Tax		7,270			4,280
Income tax expense (includes $43 and $0 for the three months ended March 31, 2015 and 2014, respectively, related to income tax expense from reclassification items)		1,912			863
Net Income		5,358			3,417
Preferred stock dividend		(31	)		(31	)
Net Income Available to Common Shareholders	$	5,327		$	3,386
Basic Earnings Per Share	$	0.58		$	0.39
Diluted Earnings Per Share		0.55			0.38

12